basic-guide-to-exporting_Latest_eg_main_086196

To be eligible, a business must have been in operation for at least 1 year and mustshow that it will enter into or increase its export sales as a result of the loan. SBA’sother eligibility requirements also apply. Eligible use of proceeds includes financingof export development activities, transaction-specific financing for export orders,revolving export lines of credit, fixed-asset loans, and financing of standby letters ofcredit used as bid and performance bonds.The EWCP, the International Trade Loan Program, and Export Express all require theparticipation of an eligible commercial bank. Most bankers are familiar with SBA’sguarantee programs, but you should ask to speak to the SBA division of the lenderyou approach.In addition to these export-oriented programs, SBA offers a variety of other loanprograms that may meet specific needs of small businesses. For example, SBA’s SuretyBond Program may help small exporters obtain bid or performance bonds that arerequired on construction contracts and on many service and supply contracts. Bidand performance bonds may be required when a small U.S. company is bidding on acontract with a foreign government or with a foreign prime contractor.For information on SBA’s programs, contact the nearest U.S. Commercial Service officeor SBA field office, call 800-U-ASK-SBA (800-827-5722), or visit sba.gov.U.S. Department of AgricultureThe Foreign Agricultural Service (FAS) within the U.S. Department of Agriculture(USDA) provides several programs to assist in the financing of exports of U.S.agricultural goods.The USDA’s Commodity Credit Corporation (CCC) administers export creditguarantees for commercial financing of U.S. agricultural exports. The guaranteesencourage exports to buyers in countries where creditis necessary to maintain or increase U.S. sales but wherefinancing may not be available without CCC guarantees.The Export Credit Guarantee Program (GSM-102) coverscredit terms up to 3 years. GSM-102 underwrites creditextended by the private banking sector in the UnitedStates (or, less commonly, by the U.S. exporter) toapproved foreign banks; dollar-denominated, irrevocableletters of credit are used to pay for food and agriculturalproducts sold to foreign buyers.The USDA may bebetter known for itsdomestic programs,but it also offersessential exportrelatedservices.The Supplier Credit Guarantee Program (SCGP) is designed to make it easier forexporters to sell U.S. food products overseas by insuring short-term, open-accountfinancing. Under the security of the SCGP, U.S. exporters become more competitiveby extending longer credit terms or increasing the amount of credit available toforeign buyers without increasing financial risk. Foreign buyers benefit because they176U.S. Commercial Service • A Basic Guide to Exporting